The e-Marketing Mix

Creating value

OHT 5.1

Chaffey: Internet Marketing, 2nd edition Pearson Education Limited 2003

Learning objectives Apply the elements of the marketing mix in an online context; evaluate the opportunities that the Internet makes available for varying the marketing mix; define the characteristics of an online brand.

OHT 5.2

Chaffey: Internet Marketing, 2nd edition Pearson Education Limited 2003

Strategic questions for e-Marketers

How are the elements of the marketing mix varied online? What are the implications of the Internet for brand development? Can the product component of the mix be varied online? How are companies developing online pricing strategies? Does place have relevance online? How does communication online work strategically?

OHT 5.3

Chaffey: Internet Marketing, 2nd edition Pearson Education Limited 2003

The marketing mix

In 1963 Bartels said: a marketer is like a chef in a kitchen a mixer of ingredients Variables used to define key elements of marketing strategy From the 4Ps of Jerome McCarthy to the 7Ps of Booms and Bitner sometimes referred to as the services mix
4Ps Product, Price, Place, Promotion 7Ps add People, Processes and Physical Evidence
OHT 5.4 Chaffey: Internet Marketing, 2nd edition Pearson Education Limited 2003

The Offering
OFFERING Product, packaging, service and brand What do you have to OFFER the customer?

What does this OFFER to other stakeholders in the value chain?

OHT 5.5

Chaffey: Internet Marketing, 2nd edition Pearson Education Limited 2003

The 4Ps and the 4Cs

Product

Cost

Price
Place

Communications with company

Customer needs and wants

Promotion
OHT 5.6

Customer convenience

Chaffey: Internet Marketing, 2nd edition Pearson Education Limited 2003

Mixing the mix online Which variables are important for the ideal customer?
Price and quality? Where they buy?

You need to decide on target markets first and do the research on the mix variables Remember the mix is not generic for all customers, but for segments

OHT 5.7

Chaffey: Internet Marketing, 2nd edition Pearson Education Limited 2003

The elements of the marketing mix

Figure: The elements of the marketing mix

OHT 5.8

Chaffey: Internet Marketing, 2nd edition Pearson Education Limited 2003

Product introduced The element of the marketing mix that involves researching customers needs and developing appropriate products Core product
The fundamental features of the product that meet the users needs.

Extended product
Additional features and benefits beyond the core product.

OHT 5.9

Chaffey: Internet Marketing, 2nd edition Pearson Education Limited 2003

Extended product options

Examples: Add-on services gift wrapping @ Amazon Endorsements Awards Testimonies Customer lists Customer comments Warranties Guarantees Money back offers Customer service (see people, process and physical evidence) Incorporating tools to help users during their use of the product Information extranets
OHT 5.10 Chaffey: Internet Marketing, 2nd edition Pearson Education Limited 2003

Brands A brand is described by Leslie de Chernatony and Malcolm McDonald in their classic book 1992 book Creating Powerful Brands as an identifiable product or service augmented in such a way that the buyer or user perceives relevant unique added values which match their needs most closely. Furthermore, its success results from being able to sustain these added values in the face of competition.
OHT 5.11 Chaffey: Internet Marketing, 2nd edition Pearson Education Limited 2003

Branding Strategy

Identity
vs.

Image

How we see ourselves...

How others see us...

OHT 5.12

Chaffey: Internet Marketing, 2nd edition Pearson Education Limited 2003

Web sites as BRANDS

What is your company without its Website? Amazon.com = NOTHING Aftonbladet.se = STILL A NEWSPAPER
BRAND LADDER: Corporate brand/Product/Service/People (CEO) Brand Image vs. Brand Identity Websites serve many segments -Employees (Intranet) -Partners/Suppliers (Extranet) -Media -Students/Educators -Shareholders -Customers -Competitors
OHT 5.13 Chaffey: Internet Marketing, 2nd edition Pearson Education Limited 2003

Building brand (Website) loyalty

Brands are like peopleeach has: A name A look (packaging) A demographic description A personality A branding audit can provide a look at your corporate/brand/Website image
C o p y rig h t2 0 0 0T imFo ster A LL R IG H TS R E S E R V E D
C o p y rig h t2 0 0 0T imFo ster A LL R IG H TS R E S E R V E D

H owthe study w orked...

5-point scale:
verensstm m er inte alls (1) (2) (3) (4) (5) verensstm m er helt

IM A G E : Inform ationsteknik/IT
U ppriktighet (3.1)
5 4 3 2

5 dim ension 15 facets 77 adjectives

Slitstark/R obust
(3.5)

1 0

Spnnande
(2.6)

U P P R IK T IG H E T -Jrdnra - rlig -Sund -M unter

SP N N A N D E -D jrv -Livfull -Fantasifull -M odern

K O M P E T E N T -Plitlig -Intelligent -Fram gngsrik

P O SIT IO N E R IN G :

Sofistikerad
(1.9)

K om petent
(3.4) B A SICF A C T S:
A vg. E m ployees: 199 A vg. R evenue: 168.1 M kr A vg. Y ear established: 1990 T ypical form :A B A ge range: 30-44 (5), 45-59(4)

SO F IST IK E R A D - verklass -C harm ig

R O B U ST -Friluftaktig -E nvis/seg

M lgrupper: IT fretag, nya fretag, SM E s F rdelar: Som m ar, universitet, sport, havet T illfllen: M ssor, turism , sport, universitet K onkurens: U m e, Stockholm , Sundsvall, U leborg P os./N eg: Stlstad, IT potential

OHT 5.14

Chaffey: Internet Marketing, 2nd edition Pearson Education Limited 2003

Brands online
Dayal et al. (2000) say, on the world wide web, the brand is the experience and the experience is the brand. The promise of convenience making a purchase experience more convenient than the real-world (or for rivals). The promise of achievement to assist consumers in achieving their goals, for example supporting online investors in their decision or supporting business people in their day-to-day work.

OHT 5.15

Chaffey: Internet Marketing, 2nd edition Pearson Education Limited 2003

Brands -cont. The promise of fun and adventure this is clearly more relevant for B2C services.
Is it???

The promise of self-expression and recognition provided by personalization services such as Yahoo! Geocities where consumers can build their own web site. The promise of belonging provided by online communities (Plus trust and reassurance).

OHT 5.16

Chaffey: Internet Marketing, 2nd edition Pearson Education Limited 2003

Online brand options 1. Migrate traditional brand online. 2. Extend traditional brand: variant. 3. Partner with existing digital brand. 4. Create a new digital brand.

OHT 5.17

Chaffey: Internet Marketing, 2nd edition Pearson Education Limited 2003

Price implications View 1 decreased prices inevitable

Price transparency Customer knowledge increases Price reduction and standardization

View 2 decreased prices unnecessary

89% purchase books from first site Only 10% are aggressive bargain hunters For corporate buyers internal changes are main benefit

OHT 5.18

Chaffey: Internet Marketing, 2nd edition Pearson Education Limited 2003

Differential pricing Options reduce or transfer. Other options Precision

Setting prices more accurately through testing (price indifference band)

Adaptability
Rapid changes (dynamic pricing). e.g. Concert tickets

Segmentation
Different charges according to profiling

OHT 5.19

Chaffey: Internet Marketing, 2nd edition Pearson Education Limited 2003

MANY WAYS TO PRODUCE REVENUE ONLINE

Purchase Rental or subscription Pay per use Online advertising sales (banners, pop-ups) SPAM (junk e-mail)

OHT 5.20

Chaffey: Internet Marketing, 2nd edition Pearson Education Limited 2003

Pricing options Cost-plus

Add profit margin to operational costs

Target profit pricing

Based on breakeven

Competition-based pricing Market-oriented

Premium-pricing Penetration pricing
OHT 5.21 Chaffey: Internet Marketing, 2nd edition Pearson Education Limited 2003

Evans and Wurster view of place

Reach: This is the potential audience of the e-commerce site. Reach can be increased by moving from a single site to representation with a large number of different intermediaries. Allen and Fjermestad suggest that niche suppliers can readily reach a much wider market due to search engine marketing Richness: This is the depth or detail of information which is both collected about the customer and provided to the customer. This is related to the product element of the mix. Affiliation: This refers to whose interest the selling organization represents consumers or suppliers. This particularly applies to retailers. It suggests that customers will favor retailers who provide them with the richest information on comparing competitive products.

OHT 5.22

Chaffey: Internet Marketing, 2nd edition Pearson Education Limited 2003

Place 2 new channel structures A. Distintermediation

B. Reintermediation
C. Countermediation

OHT 5.23

Chaffey: Internet Marketing, 2nd edition Pearson Education Limited 2003

Place 3 channel conflicts

Dependent on:
1. A communication channel only. 2. A distribution channel to intermediaries. 3. A direct sales channel to customers. 4. Any combination of the above.

OHT 5.24

Chaffey: Internet Marketing, 2nd edition Pearson Education Limited 2003

Place 4 virtual organizations what are they?

Kraut et al. (1998) suggest the following features of a virtual organisation:
Processes transcend the boundaries of a single form and are not controlled by a single organizational hierarchy. Production processes are flexible, with different parties involved at different times.

Parties involved in the production of a single product are often geographically dispersed.
Given this dispersion, co-ordination is heavily dependent on telecommunications and data networks.

OHT 5.25

Chaffey: Internet Marketing, 2nd edition Pearson Education Limited 2003

Promotion
Promotion unfortunately has a range of meanings. It can be used to describe the marketing communications aspect of the marketing mix or, more narrowly, as in sales promotion. In its very broad sense it includes the personal methods of communications, such as face to face or telephone selling, as well as the impersonal ones such as advertising. When we use a range of different types of promotion direct mail, exhibitions, publicity, etc we describe it as the promotional mix.
Wilmshurst (1993)

OHT 5.26

Chaffey: Internet Marketing, 2nd edition Pearson Education Limited 2003

Promotion tools 1 2 3 4 Advertising (broadcast, print, outdoor) Sales promotion (prizes, gifts, contests) Personal selling (face-to-face or voice-to-voice) Public relations (relationship & communication
with important publics)

5 Direct marketing (SPAM, pop-ups, offers)

OHT 5.27

Chaffey: Internet Marketing, 2nd edition Pearson Education Limited 2003

Options for replacing people

Autoresponders: These automatically generate a response when a company e-mails an organization, or submits an online form. E-mail notification: Automatically generated by a companys systems to update customers on the status of their order, for example, order received, item now in stock, order dispatched. Call-back facility: Customers fill in their phone number on a form and specify a convenient time to be contacted. Dialing from a representative in the call centre occurs automatically at the appointed time and the company pays which is popular. Frequently Asked Questions (FAQ): For these, the art is in compiling and categorizing the questions so customers can easily find (a) the question and (b) a helpful answer. On-site search engines: These help customers find what theyre looking for quickly and are popular when available. Site maps are a related feature. Virtual assistants: Come in varying degrees of sophistication and usually help to guide the customer through a maze of choices.

OHT 5.28

Chaffey: Internet Marketing, 2nd edition Pearson Education Limited 2003

Methods of managing inbound contacts

Customer defines Receipt & acknowledgement Routeing
Make contact point clear Use FAQ to reduce enquiries (Measure) Use drop down lists to categorize query Use autoresponse with service promise (number of hours) Give alternative information source (phone or web page) Large organizations use intelligent software to categorize and prioritize messages and forward them to relevant staff Use templates for common responses Answer ALL of the questions Add question to knowledge base Offer callback or follow up for key enquiries Use phone if e-mail is not solving problem
Chaffey: Internet Marketing, 2nd edition Pearson Education Limited 2003

Response

Follow-up
OHT 5.29